In a significant legal outcome, Jared Wheat and his company, Hi-Tech Pharmaceuticals, Inc., have been convicted of a wire fraud scheme that defrauded customers of more than $4.7 million. The verdict was delivered following a six-week trial in Norcross, Georgia, as reported by the U.S. Attorney’s Office for the Northern District of Georgia.
The conviction centers on deceptive practices that involved the creation of false documents to mislead customers regarding compliance with industry manufacturing standards known as Good Manufacturing Practices (GMP). Under Wheat’s direction, Hi-Tech Pharmaceuticals fabricated documentation to suggest they met necessary GMP guidelines, despite an independent auditor’s findings indicating significant deficiencies across 75 categories, representing approximately 40 percent of total criteria.
Details of the Fraudulent Scheme
As part of their fraudulent activities, Wheat and Hi-Tech concocted a fake certificate from a fictitious entity named PharmaTech Consulting. They went so far as to name one of Wheat’s former attorneys as the head of this non-existent company and forged the attorney’s signature to reinforce their deception. This false documentation misled customers, some of whom unwittingly submitted these documents to foreign regulators, allowing Hi-Tech’s products to enter international markets under false pretenses of GMP compliance.
The fraudulent activities took place between 2011 and 2013, during which time Hi-Tech Pharmaceuticals amassed at least $4,763,292 from unsuspecting customers. The prosecution benefited from a coordinated effort involving multiple law enforcement agencies, including the Food and Drug Administration (FDA) Office of Criminal Investigations and the IRS Criminal Investigation Department.
Implications and Consequences
Kelly McCoy, acting Special Agent in Charge of the FDA’s Office of Criminal Investigations, highlighted the serious implications of fabricating claims about FDA-regulated products, noting that such actions pose a substantial risk to public health and safety. The IRS Criminal Investigation Department, represented by Special Agent in Charge Demetrius Hardeman, emphasized their capacity to trace financial activities that expose complex laundering schemes like those perpetrated by Hi-Tech Pharmaceuticals.
As the legal proceedings conclude, Jared Wheat faces a potential prison sentence of up to twenty years, alongside a supervised release period. Hi-Tech Pharmaceuticals may also incur significant penalties, including fines that could reach up to twice the amount of the illicit gains and a probation period of five years. A sentencing hearing before U.S. District Judge Amy Totenberg is forthcoming, signaling a clear message to the industry: companies and individuals engaging in fraudulent activities will encounter severe legal consequences.
